Economic slowdown boosts sales of snack foods, health drinks, liquor
By Karen Flores, abs-cbnNEWS.com | 04/26/2009 6:49 PM
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Filipinos bought more snack foods, liquor, and healthy drinks as the general economy slowed in 2008, recent earnings releases of the country’s three biggest food and beverage companies showed.
In their disclosures to the Philippine Stock Exchange, listed companies Universal Robina Corporation, RFM Corporation, and Tanduay Holdings showed strong performance of their branded products in 2008.
Snacks
Listed consumer giant Universal Robina Corporation (URC) told the stock exchange that its snack foods business grew 26.7 percent in 2008 compared to the previous year. The snack foods boosted URC’s branded operations in the last quarter of 2008 when sales reached P6.935 billion, a 17-percent increase from the same period in 2007.
Some of URC's food and beverage items include Jack n' Jill snackfoods, C2 green tea, Blend 45 coffee, Nissin and Payless noodles, and Hunt's tomato-based products.
The brisk sales of these branded products allowed the Gokongwei-led company to post a double-digit growth in operating profit from October to December last year at P1.024 billion. In the last 3 months alone, URC said its consolidated net sales and services reached P13.628 billion, a 22 percent jump from the year-ago level.
Health drinks
Another listed diversified food company RFM Corporation told the exchange that the launch of new product, Vitwater, a first-mover in the vitamin-enriched water category, “contributed remarkably to the growth with very strong consumer acceptance,” company president and CEO Jose Conception said in a statement.
Besides Vitwater, RFM’s other health drinks also fared well, Conception said. "Stronger sales, ranging from 30 percent to over 60 percent growth rates, were achieved by the branded food and beverage business. Sales of beverage products increased with the launching of more Sunkist juice and iced tea flavors in more convenient PET bottles," he told the Philippine Stock Exchange
RFM Corp., which is also the maker of household brands, Swift and Selecta, reported an increase in net income to P234 million last year on the back of strong consolidated net sales, which reached P7.5 billion from the year-ago level of P6.1 billion.
Concepcion claimed RFM isn't seeing any sign of recession due to higher sales from its branded food group. He said sales growth was achieved across its many divisions last year, including canned meats, pasta, ice cream, and beverages.
Conception also noted that Selecta milk growth was led by the Fortified milk product lines, which grew by over 80 percent.
Liquor
Meantime, liquor company Tanduay Distillers Inc. (THI) registered a 14-percent growth in sales volume last year owing to its strong market dominance in Southern Philippines, according to its disclosure to the bourse.
THI sells the popular Filipino rum, also named Tanduay.
The Lucio Tan-led company reported P333 million in net income last year, a huge 273-percent rise from P89 million in 2007. The company said its consolidated revenues grew 18 percent to P9 billion last year on the back of strong liquor sales.
Price-conscious
These 2008 financial performances of three of the country’s biggest food and beverage companies, however, could have been put to test in the first quarter of 2009.
A consumer survey and inputs from the supermarkets association—a major distribution point for food and beverage companies—showed Filipinos have begun to spend less as they make the most of their hard-earned money.
According to Philippine Association of Supermarkets Secretary General Federico Ples, Filipinos have changed the way they spend due to the economic crisis. From being brand-conscious, they have resorted to becoming more price-conscious.
In an interview with ABS-CBN News last week, Ples said sales of supermarkets have gone down for the first three months of 2009, with only a growth of 1 percent from the average of 5 to 10 percent recorded in the previous years. PASI is the biggest group of local supermarkets, which includes groceries such as Cherry Foodarama.
Global market research firm Synovate said in a survey that 92 percent of Filipinos in Metro Manila have made cuts in their spending habits.
The Social Weather Stations, on the other hand, reported from its self-rated poverty survey that 6.7 million Filipino families, or 36 percent, are food-poor or highly deprived of food sources.
Both surveys were conducted in February, barely distant from last year when the crisis started to take a toll on the Philippine economy.
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